PENDING CRIMINAL DIVISION CASES

United States v. David Ricci
Court Docket Number: 1:12-cr-20049

This case is assigned to the Honorable Richard W. Goldberg, a visiting judge who will be sitting in the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, Florida.

On May 10, 2012, David Ricci, an employee of Red Sea Management, Ltd. and a head stock trader for Sentry Global Securities Limited (collectively Red Sea/SGS), two companies located in San Jose, Costa Rica, that purported to provide offshore asset protection and offshore brokerage services, was sentenced to 18 months in prison, followed by 3 years of supervised release on his February 2012 guilty plea to one count of conspiracy to commit securities fraud, wire fraud and mail fraud (Count 1: 18 U.S.C. § 371) stemming from a $7 million securities fraud “pump and dump” manipulation scheme.

According to plea documents, Ricci admitted that, beginning in approximately 2003 and continuing through approximately 2008, he acted as a stock trader and signatory on certain bank accounts and a trader on certain brokerage accounts controlled by Red Sea/SGS. During this time, he willfully and knowingly caused the manipulative trading of shares of a company called CO2 Technologies (CO2 Tech), which traded on the Pink Sheets under the ticker symbol of CTTD. According to his plea, Ricci and his co-conspirators placed trades knowing that the price and volume of the stock was being artificially manipulated in order to drive up the price of the shares and create the appearance of legitimate investor interest in the company. The shares would be sold through brokerage accounts that were established by Ricci and his co-conspirators under false pretenses, including the use of a nominee owner and the use of a virtual office mailbox located in Miami, Florida.

In a related case, on January 31, 2012, Jonathan Randall Curshen, the principal of Red Sea/SGS, and Nathan Bradley Montgomery, a Las Vegas stock promoter, were convicted by a jury each on one count of conspiracy to commit securities fraud, wire fraud and mail fraud charged in an April 2011 superseding indictment. Curshen also was convicted on two counts of mail fraud and one count of conspiracy to commit money laundering. Robert Weidenbaum, in December 2011, and Timothy Barham, Jr., Ryan Reynolds and Michael Simon Krome, in January 2012, also pleaded guilty to conspiring to commit securities fraud, wire fraud and mail fraud charged in the same superseding indictment. Weidenbaum, Barham and Reynolds were stock promoters, and Krome was a securities attorney from New York who participated in the conspiracy and evaded federal securities registration requirements in order to provide co-conspirators with millions of unregistered and “free trading” shares of CO2 Tech that were used to execute the stock manipulation.

With the exception of Reynolds, whose sentencing date has been tentatively set for the later part of October, all of defendants have been sentenced. For detailed information as to those sentences, go to the entry for U.S. v. Jonathan Randall Curshen et al.